• The latest Auditor-General report records a US$1.118 million CMED procurement for 23 vehicles, with only five delivered by the audit follow-up
• One supplier still owed three vehicles from an eight-vehicle order, while another had delivered none of 15 vehicles
• The procurement failure adds pressure to a company already waiting up to a year for Government payments and carrying ZWG93.9 million in unpaid statutory obligations

Harare-  Central Mechanical Equipment Department (Private) Limited (CMED), Zimbabwe's state-owned transport and equipment-hire company, has entered the latest Auditor-General's report with 18 vehicles outstanding from a procurement programme valued at US$1.118 million, raising questions over supplier accountability, contract enforcement and the protection of public resources. The undelivered vehicles represent investment that has yet to translate into productive assets for a company whose mandate depends on the availability of transport and infrastructure equipment.

The 2025 Auditor-General's Report on State-Owned Enterprises and Parastatals records CMED's procurement of 23 motor vehicles, of which only five had been delivered. A follow-up on previous audit findings identifies two suppliers. The first delivered five of eight vehicles, leaving three outstanding, while the second failed to deliver any of the 15 vehicles contracted.

The scale of non-delivery is particularly consequential because vehicles are central to CMED's operations. Approximately 78% of the units procured remained outstanding at the time of the audit follow-up, delaying the expansion or renewal of its operating fleet.

CMED provides transport services and hires out plant and equipment for road construction, dams, bridges and other infrastructure works. Capital committed to vehicles generates commercial value when those assets enter service, fulfil contracts and earn transport or hire revenue. Until delivery occurs, the expected operational benefits remain unrealised.

The vehicle procurement forms part of a wider pattern of incomplete equipment deliveries. CMED separately ordered three roller drums under a US$358,083 procurement but received only two. The supplier refunded US$40,000 for the outstanding unit, leaving US$8,000 unresolved at the time of the audit follow-up. Under another procurement, the company received only 22 of 50 motorbikes ordered, leaving 28 outstanding. These findings raise concerns about the effectiveness of contract monitoring and supplier enforcement across several purchases.

The Auditor-General classified the motor vehicle procurement finding as partially addressed, placing attention on the corrective measures undertaken after suppliers failed to meet their delivery obligations. The central accountability issue is whether CMED secured the outstanding assets, enforced contractual remedies or recovered payments associated with non-performance.

Efforts by Equity Axis to obtain comment from CMED through its publicly available telephone contact were unsuccessful, as calls could not get through. The article was published without a response from the company, leaving the reasons for the outstanding deliveries and the status of recovery measures unconfirmed by CMED.

Public procurement controls are intended to protect funds throughout the purchasing process. Supplier capability should be assessed before contracts are awarded, while enforceable delivery schedules, payment milestones and remedies for non-performance should govern implementation. Performance securities and advance-payment guarantees can provide additional protection where public funds are exposed before goods are delivered.

Zimbabwe's Public Procurement and Disposal of Public Assets Act establishes a framework for performance security, contractual delivery conditions, payment terms and remedies for breach. Advance payments may also require appropriate guarantees under the applicable procurement arrangements, reducing financial exposure where suppliers fail to deliver.

The Auditor-General's findings do not establish which safeguards were incorporated into CMED's vehicle procurement contracts. That information is central to determining whether the company retained sufficient contractual protection after suppliers failed to perform.

A supplier's failure to deliver 15 vehicles carries different financial consequences where CMED has retained most of the contract value than where substantial payments have already been released without adequate security. The audit establishes physical non-delivery, while supplier-level payment records and contractual guarantees are required to determine the actual financial exposure.

Accountability consequently requires disclosure of payments made to each supplier, agreed delivery deadlines, guarantees held, penalties accrued, recovery proceedings and the current status of the outstanding vehicles. These records would establish whether CMED can still enforce delivery or recover the value committed to incomplete contracts.

Economist Zvikomborero Sibanda, who previously worked with the Zimbabwe Coalition on Debt and Development (ZIMCODD), told Equity Axis that persistent failures in public-service delivery remain a major challenge for Government, particularly as similar weaknesses continue to feature in successive Auditor-General reports. He described the problem as one of the major issues requiring decisive attention, warning that procurement and service-delivery failures should not be treated lightly when public resources are at stake.

Sibanda's assessment places the CMED findings within a wider public-finance accountability problem. Repeated audit observations create an obligation to establish why corrective measures have failed, whether responsible institutions have enforced available remedies and how much public money remains exposed. Without documented follow-through, similar procurement weaknesses can persist across successive reporting periods.

The vehicle procurement must also be assessed against CMED's financial position. The Auditor-General found that six company projects were operating without contracts, while projects completed in 2022 still had US$2.77 million outstanding in receivables. Management informed auditors that it continued pursuing payment from its parent ministry.

Government remains CMED's largest customer and debtor, with the company reporting that settlement of Government invoices can take between six months and a year. These delays have contributed to liquidity pressure, while CMED had accumulated ZWG93.9 million in unpaid PAYE, VAT and corporate tax obligations by the end of the reporting period. Management also reported difficulties maintaining payment arrangements with statutory authorities.

Delayed payments weaken CMED's working-capital cycle. Services are rendered, invoices remain unsettled and cash needed to finance operations and meet statutory obligations becomes unavailable. Undelivered vehicles compound the pressure by preventing the company from putting contracted assets into productive service, although the audit does not establish how much cash was actually advanced to the suppliers.

The Auditor-General had previously raised concerns about CMED's grounded vehicle fleet. The latest follow-up records that most grounded vehicles had been disposed of and the remainder were serviceable, although the finding was still classified as partially addressed. This establishes progress in addressing unusable fleet assets while confirming that the earlier audit concern had not been fully resolved.

Fleet renewal is consequently important to CMED's commercial performance. Delayed delivery of replacement vehicles can constrain equipment availability, limit opportunities to undertake transport contracts and postpone improvements in fleet reliability. These consequences are particularly relevant to a company that has already faced difficulties maintaining an operational vehicle base.

The CMED findings form part of a broader procurement-control problem identified by the Auditor-General across state-owned entities. Weaknesses in due diligence and contract management contributed to unrecovered payments for machinery, vehicles and other goods that remained undelivered. Elsewhere, contract price variations of up to 32% were recorded without supporting addenda, exposing deficiencies in contract documentation and oversight.

The recurrence of such findings strengthens Sibanda's concern about public-resource management. Procurement failures can impose costs long after a contract has been awarded, particularly where institutions do not enforce delivery obligations or recover amounts owed. For taxpayers, accountability depends on whether expenditure produces the intended public service and whether failed transactions are corrected.

CMED's 18 outstanding vehicles demonstrate why procurement accountability must extend beyond tender awards and contract approvals. The economic value of the transaction is realised when the assets are delivered, accepted, registered and deployed. Procedural compliance at the purchasing stage cannot compensate for incomplete delivery where the intended operational benefit remains unavailable.

The company's unmodified audit opinion does not resolve these concerns. Such an opinion means the financial statements were fairly presented in accordance with the applicable reporting framework. The Auditor-General nevertheless identified incomplete procurement, weaknesses in contract management, substantial Government receivables and unpaid statutory obligations. The findings require corrective action even where the financial statements themselves meet accounting requirements.

The immediate priority is to establish the outstanding contractual obligations and the measures taken to enforce them. CMED should disclose the number of vehicles still owed by each supplier, payments already made, guarantees available, penalties imposed and recovery action initiated. Suppliers capable of fulfilling their contracts should be held to enforceable delivery schedules, while continuing non-performance should trigger appropriate remedies under the procurement agreements.

Future procurement arrangements should link payments closely to verified delivery milestones, supported by performance security and advance-payment guarantees where applicable. These safeguards would reduce exposure to supplier default and improve the company's ability to recover committed capital. The Auditor-General has established the shortfall in physical delivery; the remaining financial question is how much of the procurement value has been protected, recovered or converted into usable assets.

Continued non-delivery would add to CMED's existing financial constraints, including US$2.77 million in outstanding Government receivables and ZWG93.9 million in unpaid statutory obligations. For a company whose mandate depends on the availability of transport and infrastructure equipment, unresolved procurement contracts can limit operating capacity and delay the economic benefits expected from public investment.

The final measure of accountability is whether the contracted vehicles are delivered and put to work, or the public funds advanced for undelivered assets are recovered.

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